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What do Corporations have to do with Fair Trade? Positive and Normative Analysis from a Value Chain Perspective

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Abstract

There has been tremendous growth in the sales of certified fair trade products since the introduction of the first of these goods in the Netherlands in 1988. Many would argue that this rapid growth has been due in large part to the increasing involvement of corporations. Still, participation by corporations in fair trade has not been welcomed by all. The basic point of contention is that, while corporate participation has the potential to rapidly extend the market for fair trade goods, it threatens key aspects of what many see as the original vision of fair trade – most notably a primary concern for the plight of small producers and the goal of developing an alternative approach to trade and development – and may even be undermining its long-term survival. The primary purpose of this article is to explore the normative issues involved in corporate participation in fair trade. In order to do that, however, it first provides a positive analysis of how corporations are actually involved in fair trade. In order to achieve both of these ends, the article draws upon global value chain analysis.

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Abbreviations

ATO:

alternative trade organization

EFTA:

European Fair Trade Association

FINE:

FLO-I + IFAT + NEWS + EFTA

FLO:

Fair Labelling Organization

FLO-I:

Fair Labelling Organizations International

FTF:

Fair Trade Federation

GVC:

global value chain

IFAT:

International Federation of Alternative Trade

NAATO:

North American Alternative Trade Organization

NEWS:

Network of European Worldshops

NGO:

Non-governmental organization

TNC:

transnational corporation

UCIRI:

Unión de Comunidades indígenas de la Regiódel Istmo (Union of Indigenous Communities of the Region of the Isthmus)

UFCO:

United Fruit Company

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Acknowledgement

The author would like to acknowledge support from the Social Science and Humanities Research Council of Canada (Social Economy Suite competition) which made the writing of this article possible.

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  1. Division of Social Science, York University, 7th Floor South Ross Building, 4700 Keele Str., Toronto, ON, Canada, M3J 1P3

    Darryl Reed

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Reed, D. What do Corporations have to do with Fair Trade? Positive and Normative Analysis from a Value Chain Perspective. J Bus Ethics 86 (Suppl 1), 3–26 (2009). https://doi.org/10.1007/s10551-008-9757-5

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